Emergency loans

Emergency loan is a loan that is taken in times of urgency and it would be credited to the borrower’s account overnight. A person could get £1000 as emergency loan if he is employed and is having a savings account in the bank.

This is a short-term loan and could be paid back in one or two pay periods (Personal loan, 2007). Banks as well as private lenders offer this type of loan. It does not require a good credit record of the borrower. It is usually used to pay medical bills, utility bills and other emergency expenses.

There are different ways in which an emergency loan could be obtained from a bank. It could be in exchange of the borrower’s credit card, or as home equity loan or as an unsecured loan. The interest rate would vary in each case depending on the risk taken by the bank. In case the borrower is not in a position to get an emergency loan from a bank, then he could go for private lenders. But it would be highly risky because the interest rate of emergency loan from such lenders would be very high (Pritchard, 2007). Students are provided with interest free emergency loan to support them for a short period of time by some of the universities in UK (Emergency loan, 2007)

Unlike crisis loans, emergency loans are associated with good interest rate. However, in case of emergency a person in UK could easily obtain a good amount of money within 24 hours as emergency loan, which should be repaid within a short period of time.

References:

Personal loan (2007) [online] Available at: http://www.credit.com/products/loans/ (accessed on 22-11-2007)

Pritchard, J. (2007) Emergency cash loans [online] Available at: http://banking.about.com/od/loans/a/emergcashloan.htm (accessed on 22-11-2007)

Emergency loan (2007) [Online] Available at: http://www.ucl.ac.uk/current-students/financial-support/emergency-loans/ (accessed on 22-11-2007)